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A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies

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A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies ( a-manual-economic-evaluation-energy-efficiency-and-renewable )

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Sunk Cost Any cost incurred by a prior decision that cannot be affected by the current course of action. Taxable Income That portion of revenue remaining after all deductions permitted under the Internal Revenue Code or a State Revenue Code have been taken. Tax Recovery Class One of several classes that determines the period of time over which the cost recovery tax deduction occurs Tax Preferences Incentives designed to encourage investment as a stimulus to the overall economy. Examples are deferred income taxes and the investment tax credit. Tax Rate The rate applied to taxable income to determine federal and state income taxes. Total Plant Investment - TPI Total plant cost as modified by escalation and interest during construction. Uncertainty The range of possible values a variable may have in the future. Uniform Capital Recovery Factor - UCFW The uniform periodic payment, as a ftaction of the original investment cost, that will fully repay a loan, including all interest, over the term of the loan. Weighted Average Cost of Capital The weighted average of the component costs of debt, preferred stock, and common equity. This is sometimes used as a proxy for discount rates in the industrial and utility sectors. 96

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